Before you go ahead with your investment in gold or silver, there are certain actions you need to undertake, if you want to ensure your investment is safe. After all, investing in gold is just an investment, and requires money, many times the savings of a lifetime.
Gold is just an investment, an investment that can be profitable under the right circumstances. An investor must never be passionate, must always keep a cool head, because gold in a certain environment tends to do well, and in other markets, the environment tends not to do well. The investor will have to examine whether this is the right time to put his/her money on gold or not to.
There are several reasons to invest in gold. The two most important are: a) to protect and preserve wealth from unexpected events. b) a hedge when the stock market is not expected to do well.
To an ordinary person, a good reason to invest in gold is when paper money is worthless. That has happened several times, especially in the seventies when due to high inflation, paper money even the dollar lost its value dramatically. Low or negative interest rates, is also another reason for an ordinary person to preserve his/her wealth.
What type of gold investment
There are two types of gold investment, physical gold, and paper gold. Physical gold is tangible, jewelry, gold coins, and gold bars. While paper gold consists of the E.T.F.’s, gold exchange-traded funds, or gold-related equities in the stock market. The latter is risky, as there is no guarantee that the fund holds the amount of gold it claims.
Why should your portfolio include gold?
Gold is the best way to diversify your assets. When the price of gold moves the opposite way of other types of investments, it balances out your returns when the other investments perform badly.
How pure your gold should be
Pure gold 100% is too soft, therefore it is mixed with other types of metals, (silver, copper, etc) to improved its strength. Based on the content of gold, it is divided into Karat configurations. 9K(37.50%) 14K(58.33%) 18K(75.00%) 22K(91.66%) 24k(99.99%) Make sure you are getting what you paid for.
What is the real price of gold?
Just like anything else, supply and demand determine the price of gold. Other factors include Interest rates, inflation, political instability, stock market prices, and currency prices.
Where you should buy physical gold
In many countries, you can buy gold directly from the bank. You can also buy gold coins or bars online after you find a credible trader.